Top regulator predicts "sparse" marijuana market out of the gate

Tuesday

May 1, 2018 at 5:19 PMMay 1, 2018 at 5:28 PM

By Colin A. YoungSTATE HOUSE NEWS SERVICE

With two months until retail pot sales are expected to begin, the Cannabis Control Commission chairman said to expect a "sparse" marijuana market this summer, even as the CCC opened the license application process to more applicants Tuesday.

The CCC on Tuesday approved another 16 economic empowerment applicants and two registered marijuana dispensary (RMD) companies to have their license applications reviewed on an expedited basis. But even as the CCC announced that 25 prospective marijuana businesses have submitted a license application, Chairman Steven Hoffman said municipal roadblocks and issues around ensuring a supply of marijuana could limit the initial size of the industry.

"I think it's going to be sparse, let's just be honest," Hoffman said when asked what he expects to see July 1. "There are going to be some number of people that are up and running that have all the municipal approvals necessary and have the ability to have supply. It's not going to be a large number ... I really think it's going to play out over six to twelve months past July first."

Before the CCC will approve a license, the applicant must demonstrate that they have held a community meeting and executed a host community agreement with the city or town. Many towns across the state have imposed moratoriums or bans on retail marijuana shops, further complicating things as businesses try to get off the ground.

And before any business can open, it needs to secure a supply of marijuana to sell. Right now, only RMDs are allowed to grow marijuana commercially and new licenses for cultivation will not be approved by the CCC until at least June 1.

"Given the realities of having to go through the municipal approval process as well as obtaining supply, I think it's fair to say it's not going to be on every street corner of every city and town in Massachusetts," Hoffman said Tuesday.

The chairman said he expects that the industry is "going to grow out of" its supply issues as more farms come online and the supply increases. But the hurdles at the municipal level will require more time.

"I am taking the cities and towns at face value when they say that the moratoria that they have put in place are planning tools and that they wanted to see our final regulations -- which they have -- they wanted to go through their own planning and meeting process -- which they're going through right now," Hoffman said. "I'm taking them at good faith so I expect that over time many of the cities and towns that have moratoria will open for business."

The Boston Globe reported in March that at least 189 of the 351 municipalities have banned retail marijuana stores and most have also imposed restrictions on other marijuana businesses.

Also Tuesday, the CCC approved another 18 applicants for its priority license application review program, bringing the total number of applicants who can skip to the front of the line when the CCC begins reviewing license applications to 148 -- 79 RMDs and 69 economic empowerment applicants.

Those approved for priority review can submit their license application at any time, regardless of which type of license they are seeking.

Marijuana retailers and product manufacturers that have not been approved for priority review will be able to apply for licenses beginning June 1. The CCC cannot legally issue a license until June 1 and expects legal sales to begin July 1.

"I feel like we're in good shape and we will continue to hit all of our mandated deadlines, as we've done to date," Hoffman said Tuesday.